Q4 is coming to a close, the holiday season is upon us, and Kenya’s businesses are settling their accounts for the year. 

In many ways, transport and logistics, which support numerous sectors of the Kenyan economy, seem to be on an upswing. The Kenya Ports Authority (KPA) reported a 4.4% growth in container traffic during the first eight months of the year, and Kenya’s all-new port at Lamu launched in May. 

But, alongside positive figures and groundbreaking infrastructure projects that point to an optimistic outlook for the logistics industry, Kenya—just like the US, UK, and other countries throughout the world—is also feeling the impact of a COVID-19-induced supply chain shortage.

Will tech offer a solution to help the industry sustain itself?

A global meltdown

On a global level, the supply chain meltdown began with a container shortage that cropped up at the end of 2020, with freight rates rising higher than 264%, compared to previous years. Prior to this, containers moved from China to Europe and North America, but COVID-19 restrictions limited air freight, creating an increased demand that prevented the flow of containers back to East Asia.

Following that, demand for Chinese exports skyrocketed after a pandemic-induced slump. At this point, global supply chains were already out of balance, and demand for exports exceeded the supply of shipping containers.

By March 2021, shipping container rates from China to the US and Europe had increased by 300%, compared to the year before. 

Trade under lockdown

In Kenya, it began with a lockdown. 

The start of the pandemic led to a gridlock in Kenya’s transport industry that had an immediate impact on the country itself, and the region as a whole. 

Industries with markets outside of the East African community were among the hardest hit. East Africa’s flower industry, for example, which ships fresh flowers via air to European countries, suffered an estimated $1 billion in losses when European countries sealed their borders. Ethiopia, Africa’s second-largest flower exporter, also reported an 80% reduction in flower export volume. 

Due to restricted sea and air routes, imports to Kenya decreased by 23%, but the permission of select land transport that allowed goods to flow by land between borders meant that “other countries in the East African community benefited,” said Manaseh Otieno, Trade and Policy Manager at the Kenya Association of Manufacturers (KAM).  For example, trade between Kenya, an exporter of palm oil, petroleum oil, and salt, and Uganda, an exporter of milk, tobacco, cane, and energy, increased by 11.3%

But transport by land between the countries was still slow and prohibitively expensive. 

As positive COVID cases began to increase in East Africa, Rwanda, Uganda, and Kenya agreed to test all truck drivers entering and exiting the three countries. However, unequal distribution of COVID-19 resources and inadequate supply chains to get them to East Africa meant a scarce number of test kits. This led to a buildup of drivers along the border, lost goods, an overall decrease of truck inflows into Uganda, and an increase in shipping cost at around 48%

While the flower industry is rebounding and trucks are moving more freely, the temporary dismemberment of the supply chain industry may continue to have knock-on effects on businesses in the East African economy. 


The US is already feeling inflationary pressures caused by supply chain issues that have resulted in a 6.2% increase in the US Consumer Price Index—a measurement used to estimate price changes in a basket of goods—compared to last year. 

Kenya is experiencing a similar phenomenon. 

In April, the cost of bread in Kenya increased by $.044 for the first time in four years and is set to increase yet again. The  Cereal Millers Association (CMA) points to lower global wheat stocks, marine freight issues, and the rising cost of fuel to its highest levels in the past 10 years as the causes of the price increase. 

Reliability is key

Kenya’s potential supply chain crisis and its impact can be mitigated. 

A major aspect of the rise in prices caused by the current meltdowns is uncertainty, which can be costly in the logistics industry. 

The market is currently highly uncertain, which can present difficulties for even the most well organised businesses.

“The shipping lines are like a small mafia,” said Dr. Simeon Obidairo, co-owner of BoConcept, a contemporary, Danish, luxury furniture line in the process of reopening in Nairobi.“They tell you transit times for the shipping is going to be six weeks; the shipment leaves, and they end up delivering it 12 weeks later. So, we’ve seen at least double the typical transit times.” 

A typical method of organising and tracking shipments to lessen supply chain disruptions is through the use of technology, which, when underutilised, creates major operational kinks that can be cumbersome to correct. 


A new Personal Information Protection Law out of China, for example, is preventing the provision of real-time shipping information by some China-based shipping companies, triggering fears of further shipping disruptions. As China is home to six out of 10 of the world’s largest container ports, this has caused a 90% drop in terrestrial shipping data that companies use to track the arrival and departure of essential goods.

East Africa’s logistics industry is still growing to a place where it is similarly tech-reliant. At present, most trade in the region happens informally. But more reliability is highly desired: “We need frameworks to support digital trade,” said Manaseh Otieno. “Whatever the client has ordered should be what they actually get. And if it isn’t, there should be a mechanism to address these issues.”

Due to pandemic-induced demand shocks, transporters in the region also cut back. As consumption rises amid holiday festivities, and businesses increase capacity, those who fail to become more tech-reliant may find themselves “ill-positioned across the country primarily due to the low adoption of technology by the industry,” said Tayo Oyegunle, COO of Moove, a logistics platform that offers on-demand solutions to both customers and businesses within East Africa.

Investor appetite for the transport and logistics sector was still high in 2021, with a total of $200 million raised by the industry as a whole in Africa during the first eight months of the year. But, much of this has been attributed to the January commencement of the African Continental Free Trade Area (AfCFTA), a 34-member-state-strong agreement that aims to introduce non-tariff barriers throughout the African continent.

But, the AfCFTA’s success for Kenya and the region as a whole also necessitates more coordination on a technological level. Without it, it may be years before we see supply chain issues corrected and an environment for freer trade realised. 

Alexandria Sahai Williams Senior Reporter, East Africa, TechCabal

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